February 2019

RRSP's:  Are they still a great investment vehicle?
RRSP's still make great sense.  But with different investment options available, they are not always the best option.  Here's a list of tips to consider when choosing the best way contribute to an RRSP, and the best ways to cash out! 
When to contribute to an RRSP:
*When you need a tax break
*When you expect to pay a lower tax bracket later when starting to withdraw
*When you are saving to your retirement, and want tax-deferred growth
*When you are saving for a down payment on a home, you can benefit from using the Home Buyer's plan.  This allows you to benefit from the tax breaks when making RRSP contributions, and then withdraw up to $25,000 towards your down payment (tax free).  You do have to pay yourself back!
*When you have the benefit of a matching contribution from your employer.  This is a great benefit that many don't take advantage of!  This great savings vehicle is a must-do in my books!
*One twist is that Spousal RRSP contributions can still apply to help with income splitting in retirement.  This means the higher income earner contributes to an RRSP for the spouse.  We use the high-income earners tax rate, and RRSP contribution room, but the withdrawals will be in the spouses name and at that tax rate (ideally lower).
When to Pass and consider other options:
*If you have cashflow, but virtually no taxable income, you must ensure that RRSP actually makes sense.  If you will pay more tax when withdrawing the funds, is the tax deferral beneficial enough, or will it cost you.  In this case, I would usually prefer to contribute to the TFSA.  The tax-free benefit will often outweigh the initial tax-break of the RRSP.
* If you may need the funds in the shorter-term.  Once contributed to the RRSP, you can withdraw them and pay tax.  However, you are not able to use that RRSP room again.  So, technically, you have lost the long-term tax deferral benefit once it/s withdrawn.  (Only a few exceptions apply, such as the Home Buyer's Plan and the Lifelong Learning Program)
* If you do have years where you have no income, then the RRSP can be used, or withdrawn and re-invested.  In fact, in some cases, this makes sense.  Once you start collecting CPP (Canada Pension Plan), OAS, (Old Age Security) and company pensions, then the RRSP (or RRIF withdrawals) are an extra that simply increase your tax rate.
There are many more strategies to use the RRSP/s and the RRIF/s effectively.  Need more information, then book your next appointment or send a quick email.  
In the meantime ensure you make your contribution by March 1, 2019, to benefit from a tax reduction for 2018.  
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March 7, Richmond Hill Board of Trade Business Achievement Awards.  The awards recognize leading local businesses and their commitment to Richmond Hill's future.  Assante Richmond Hill was thrilled to be a winner of the Professional Services Award in 2018.  It/s also been exciting this year, as I/ve been on the judging committee.  Learning about some amazing new companies in the Richmond Hill area is a great privilege.
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Markets Got You Down
Here are a few different perspectives to help you better understand what the impact is.  

Last year, we anticipate more volatility, and we saw it.  This was especially true in the 4th quarter.  See more how this applies with Portfolio Construction- What is Your Outlook For 2019

iShares Insight: Investor Guide in 2019

Changes to Investment Options

With the constant influx of new ETF's and product in the market, we are now seeing increased availability of more unique products for the average investor.  

The number of products is now overwhelming, making selection a difficult process.  However, the benefit is that you can construct a diversified portfolio in many ways.

Of late, we are also seeing additional items that used to be available only for the wealthy and the institutions.  Portfolio compliments such as Private Global Real Estate portfolios and Liquid Alternatives offer complements that go beyond the traditional balanced portfolio.  

There are also a number of portfolio structures that feature strategies that provide more benefit in volatile markets, and sometimes even down markets.

Last, there are also items that can provide some guarantees.  

No product is perfect, but the benefit is that with the variety and options now available, getting a completely customized portfolio is more available than ever before.  Interested in learning more about these newer retail strategies, just let us know.  We can provide some information to help educate you on the options available.  
Reminder: RRSP Deadline for 2018  
Friday March 1st.
Maximum contribution for 2018:
$26,230 (or 18% of your earned income in the prior year, less any pension adjustment) 
Maximum contribution for 2019:
$26,500 (or 18% of your earned income in the prior year, less any pension adjustment)  

Contact us to learn more about RRSP Loans and Retirement Plans available to you. 
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We will be featuring more tips and ideas to help you in 2019

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Everything we see hides another thing, we always want to see what is hidden by what we see

Rene Magritte 

This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd.
Insurance products and services are provided through Assante Estate and Insurance Services Inc. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada.
Assante is an indirect, wholly-owned subsidiary of CI Financial Corp. ("CI"). The principal business of CI is the management, marketing, distribution and administration of mutual funds, segregated funds and other fee-earning investment products for Canadian investors through its wholly-owned subsidiary CI Investments Inc. If you invest in CI products, CI will, through its ownership of subsidiaries, earn ongoing asset management fees in accordance with applicable prospectus or other offering documents.

Services and products may be provided by an Assante Advisor or through affiliated or non-affiliated third parties.
Janine Purves,
Senior Financial Advisor
Assante Capital Management Ltd.
Ph (905) 707-5220
Fax (905) 707-1035
9130 Leslie St.,
Suite 302
Richmond Hill,
ON L4B 0B9
Visit our website at www.janinepurves.com